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How (not?) to manage gas wealth

The experience of Sasol’s projects in Inhambane may hold lessons as revenue starts arriving from the Rovuma basin

Today’s front pages in Maputo. Photo © Faizal Chauque / Zitamar News

Good evening, or good morning. Zitamar today features an article from Vilanculos, the town known for tourism and for its proximity to gas fields exploited by South Africa’s Sasol. As the researchers who write for Zitamar point out, locals feel strongly that the riches that ought to be associated with sitting on valuable hydrocarbons have not materialised, at least for them.

The latest from Zitamar News:

Sasol’s gas exploitation in Vilanculos: is zero harm possible?
South African company Sasol has been exploiting gas in the Vilanculos region for 20 years, but local benefits can be hard to find, write Eloïse Bodin and Mathilde Schoenauer Sebag
Mozambique’s LNG exports pass $1bn
Mozambique has passed the landmark of $1 billion worth of LNG exports from Eni-operated Coral South FLNG platform floating in the Rovuma Basin

From the Zitamar Live Blog:

Zitamar Mozambique Live Blog
Today’s front pages on the streets of Maputo. 📷 Faizal Chauque / Zitamar News The independent weekly Canal de Moçambique has a story about a man who joined Renamo’s marches in Maputo, who says he was pursued into his home and had a finger amputated by members of “death squads” acting for Frelimo.…

Sasol’s project there, in the north of Inhambane province, was one of the first major foreign investments in Mozambique after the end of the civil war in 1992. As such it was made when Mozambique was in a very weak negotiating position. Sasol has been repeatedly criticised, by Mozambican civil society and, less publicly, by the government; of late, the nature of the relationship has changed, and to be fair to the company, it is now making significant investments in local projects to generate power and to produce cooking gas. Relations with the local community are also improving.

In some ways it’s been a dress rehearsal for how Mozambique is going to manage the far greater gas wealth that has been discovered in the Rovuma Basin. As we also report today, sales revenues from the first LNG project there, the floating Coral South liquefaction plant, have now passed $1 billion in the less than 12 months that it has been operating.

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